There is more to BH than how they acquire companies. They also have a track recored of out performing S&P for decades. I doubt if BH alpha is because of their streamlined acquisition process.
Does Tiny have a similar record?
Does Tiny have a similar record?
BH has a good record because they have structured their business to have a permanent edge: Their insurance&reinsurance business (half of the business) generates cash and float constantly. The side of the company seeks ways to invest all that cash. Often buying whole businesses.
In other words, BH cuts out several levels of middlemen. They are an insurance company, holding company, private equity & alternative investment management company and investment fund rolled into one. Cutting out banks, private equity, fund managers bring in huge savings.
The reason why BH has not been outperforming SP500 in the last 10 years is that cash is cheap for everyone (this is the longest boom in history) Once the water level drops again and we see who swims naked, BH will outperform again.
At the start of the tech companies’ boom, Buffett famously said he does not invest in tech companies because he does not invest in what he does not understand. Then he bought a ton of Apple a few years later, and that is basically the only thing keeping Berkshire stock in the game.
The last amazing deal I can recall that Berkshire made was Goldman Sachs during the 2008 financial crisis. Other than that, I think he might have been better off buying VOO. The company itself is 40% Apple right now, for which Berkshire paid full retail price when it was bought.
I think the parameters of the game that used to allow Buffett to achieve exceptional results have long changed, as evidenced by the numbers.
Did he buy it or was it one of the two fund managers who work for BH?
Unless you think that there will be no financial crisis or severe recession again, Berkshire will probably shine again.
Yup...famously Buffett's worst acquistion was of Berkshire Hathaway itself!
It probably cost him ~$200B.
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